A Car for Every Indian? ; Perhaps Not in Another 50, or Even 100, Years, but There's Little Doubt That India Is Among the Last Virgin Car Markets.

Summary

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By the time this issue hits the stands, India's biggest auto fest would have got underway in Delhi. Like every year, almost all the top automotive companies would have put on display some of their best cars for thousands of visitors, who will throng the six-day Auto Expo, to see and drool over. That's as close most of those curious visitors, representing a microcosm of the country, will get to owning a car. Yet, for the global automotive industry, they are its best hope.

In the us, car and light-truck sales showed no growth last year, remaining steady at 16.9 million units; in Europe, it was a marginally better year, with growth at just over a percentage point (despite a massive fall in UK car sales); and in Japan, sales tumbled 3 per cent. China was the one bright spot for the global industry, growing 18 per cent in 2005, but signs of a slowdown were evident in the last few months. In contrast, India crossed the 1- million mark for passenger cars (including utility vehicles) last year, and is projected to grow at 15 per cent till 2010. To put it another way, while it took about 10 years to double new car sales to a million units, it will take half that time to reach 2 million, perhaps even 2.5 million, by 2010. "The basic affordability of a car is increasing, which is why demographic groups that would never have bought cars earlier are buying cars now," points out Jagdish Khattar, Managing Director of India's largest car manufacturer, Maruti Udyog Ltd (MUL).

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A Car for Every Indian? ; Perhaps Not in Another 50, or Even 100, Years, but There's Little Doubt That India Is Among the Last Virgin Car Markets.

The huge untapped market has prompted carmakers to rev up their plans. MUL, along with its Japanese parent Suzuki Motor Corporation, is setting up a new plant not far from its existing facility in Gurgaon near Delhi that will roll out 250,000 cars a year by the end of 2006. At their full capacity, MUL's two plants will churn out 850,000 vehicles a year. MUL's bitter rival and #2 in the market, Hyundai Motor India (HMI), is mulling a second plant right behind the one it already has in Sriperambudur near Chennai. Tata Motors,...

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